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Catch me if you scan: Data-driven prescriptive modeling for smart store environments

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  • Hauser, Matthias
  • Flath, Christoph M.
  • Thiesse, Frédéric

Abstract

The increasing adoption of omnichannel strategies in recent years has led retail companies worldwide to fundamentally rethink the future role of their network of brick-and-mortar stores. One strategic option being pursued by many retailers is the transformation of the stationary store into a “smart store,” augmented by various digital services. However, an essential prerequisite for the success of smart store services is high quality of the underlying data generated through the use of technologies for tracking products and customer behavior. As a means of investigating the use of machine learning to improve data quality, the present study considers the example of Radio Frequency Identification (RFID) as a technological infrastructure for tracking products in fashion retail. We examine electronic article surveillance and automated checkouts as practical use cases enabled by a classification model for the detection of product movements on the store floor. In order to identify an economically optimal configuration of the classifier, we develop a complementary service operations model that allows for determining the respective cost impact. In addition to the specific results for the considered use cases, the study thus points to a general and novel prescriptive analytics approach.

Suggested Citation

  • Hauser, Matthias & Flath, Christoph M. & Thiesse, Frédéric, 2021. "Catch me if you scan: Data-driven prescriptive modeling for smart store environments," European Journal of Operational Research, Elsevier, vol. 294(3), pages 860-873.
    • Handle: RePEc:eee:ejores:v:294:y:2021:i:3:p:860-873
    DOI: 10.1016/j.ejor.2020.12.047
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    2. Hübner, Alexander & Hense, Jonas & Dethlefs, Christian, 2022. "The revival of retail stores via omnichannel operations: A literature review and research framework," European Journal of Operational Research, Elsevier, vol. 302(3), pages 799-818.
    3. Erkip, Nesim Kohen, 2023. "Can accessing much data reshape the theory? Inventory theory under the challenge of data-driven systems," European Journal of Operational Research, Elsevier, vol. 308(3), pages 949-959.
    4. Jiahe Chen & Yu-Wei Chang, 2023. "How smart technology empowers consumers in smart retail stores? The perspective of technology readiness and situational factors," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-24, December.

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